Nov. 9 (Bloomberg) -- Sino Land Co., the Hong Kong developer controlled by billionaire Robert Ng, fell the most in almost two years in Hong Kong trading after saying it will raise HK$5.14 billion ($663 million) in a private sale of shares.
The shares dropped 7.3 percent to HK$16.94 as of 10:08 a.m. local time, the biggest decline since Jan. 8, 2009. The company will sell 305 million shares at HK$16.85 apiece in a top up placement, according to a statement to the Hong Kong stock exchange today. That’s a 7.8 percent discount from yesterday’s close.
Sino Land, which reported a 2.6 percent drop in full-year profit excluding revaluation gains in September, said it will use the funds as working capital.
The shares today were downgraded to “reduce” from “buy” by Keith Yeung, an analyst at Mirae Asset Securities. Hang Lung Properties Ltd., Hong Kong’s third-biggest developer by market value, fell by the most in 21 months on Nov. 5 after placing shares to raise about HK$10.9 billion.
Home prices in Hong Kong have surged 51 percent since the beginning of 2009 on record low mortgage rates and an influx of mainland Chinese buyers, prompting the city’s government to announce a series of measures since October to curb the formation of an asset bubble.
The company derives almost all of its sales and profit from property development and investment in Hong Kong.
The developer’s shares have gained 13 percent in Hong Kong trading this year, compared with the 18 percent increase in the Hang Seng Property Index, of which Sino Land is a member. The stock fell 1.7 percent to HK$18.28 yesterday.
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